Improving efficiency in banks' loan origination system

Overview

Loan Origination Solution (LOS) is part of an industry-leading digital banking solution suite that is used by banks in around 100 countries to serve over 1 billion customers. Origination is a lengthy process followed by the banks to investigate the financial health of the borrower. This helps the bank negotiate terms of the loan and agree upon the loan amount to be offered.

Financial statements (Income Statement, Balance Sheet, & Cash Flow Statement) are key to investigating the financial health of any commercial organization.

Problem

With continually emerging industries and customer segments, banks must constantly update their financial statement templates. Additionally, these templates must adhere to numerous global, local, and organizational regulatory compliance policies.

Currently, all activities related to managing financial templates—authoring, documenting, configuring, and sharing—are performed manually using standard office suite tools.

Although familiar, these tools hinder transparency in the origination process, increasing the likelihood of errors and operational inefficiencies. Ultimately, this lengthens the loan closing time and impacts the profitability of banks.

User Research

A remote workshop was conducted with Finacle stakeholders, product owners, ICICI Bank admins, and relationship managers. My research encompassed:

Understanding the current process of creating financial templates.
Flow of a financial template across the bank.
Roles and responsibilities of bank employees at different levels.

User Profiles

The research made it evident how employees at different levels would have different expectations from the platform. To cater to this, I categorized them into three user profiles based on their roles and responsibilities.

Regulating Admin
- Reporting & monitoring regulatory metrics across the organisation.
Bank Admin
- Configures various financial templates for various commercial segments & domains.
- Responsible for making sure that the financial templates are constantly updated to comply with the global, local & organisational regulatory mandates.
Relationship Manager
- Point of contact with the end customer(borrower)
- Shares relevant & updated financial templates with the customers.
- Collects financial statements and necessary proofs from the customer.
Customer
- Fills data according to the attributes provided in financial templates.
Credit Analyst
- Calculates & analyses financial ratios for credit underwriting and monitoring.

Regulating Admin
- Reporting & monitoring regulatory metrics across the organisation.
Bank Admin
- Configures various financial templates for various commercial segments & domains.
- Responsible for making sure that the financial templates are constantly updated to comply with the global, local & organisational regulatory mandates.
Relationship Manager
- Point of contact with the end customer(borrower)
- Shares relevant & updated financial templates with the customers.
- Collects financial statements and necessary proofs from the customer.
Customer
- Fills data according to the attributes provided in financial templates.
Credit Analyst
- Calculates & analyses financial ratios for credit underwriting and monitoring.

Opportunity Areas

The insights gathered from the stakeholders were analyzed and mapped to 3 main opportunity areas:

1. Optimising Resources:

Admins are handling issues related to regulations in silos across various bank divisions. Due to this significant time & resources are spent achieving the same result. There is no centralised medium to manage financial templates.

2. Reducing cycle time:

With constantly changing markets; the customer behaviour has also changed. Now customers expect documentation & approvals in minutes as opposed to days. Current manual management of templates is ineffective & considerably increases the loan closing time.

3. Reducing Risk Exposure:

Financial statements should fulfil numerous & complicated compliance issues. However, manual handling of financial template increases the potential for non-compliance due to human errors.

The insights gathered from the stakeholders were analyzed and mapped to 3 main opportunity areas:

1. Optimising Resources:

2. Reducing cycle time:

3. Reducing Risk Exposure:

Financial statements should fulfil numerous & complicated compliance issues. However, manual handling of financial template increases the potential for non-compliance due to human errors.

How might we improve transparency in banks' workflow so that financial templates can be managed effortlessly with the least human-errors?

The biggest challenge was identifying the capabilities & constraints to be introduced for each user role so they are able to carry out required functions efficiently & with least errors.

Goals, Tasks & Actions

The workflow helped me identify user goals for each of the profile. Tasks & actions to be performed for acheiving each goal were identified. This helped in creating Information Architecture for the platform.

1. Creating/Uploading a master attribute template:

Adding new financial attributes
Arranging attributes in hierarchy
Uploading an existing master template

1. Creating/Uploading a master attribute template:

Adding new financial attributes
Arranging attributes in hierarchy
Uploading an existing master template

Updating a master-attribute template

Adding new financial attributes
Arranging attributes in hierarchy
Deleting existing attributes
Editing existing attributes

Updating a master-attribute template

Adding new financial attributes
Arranging attributes in hierarchy
Deleting existing attributes
Editing existing attributes

3. Configuring a new financial template

Adding template details
Select attributes from the master template
Define formula for attributes selected

3. Configuring a new financial template

Adding template details
Select attributes from the master template
Define formula for attributes selected

4. Customising an existing financial template.

Select new attributes from master
Deselect existing attributes
Redefine formulas wherever necessary

Conceptualization

Next, I started creating task flow & lo-fidelity concepts for primary use cases. Lo-fi prototypes were tested with the stakeholders weekly to get feedback on the functionality, content, and interactivity.

A key feedback obtained was that the heirarchy in attributes is defined in the master-template itself. This changed the task flow for bank admins creating a new financial template. The priority moved from assisting the bank admins define hierarchy (every time they were creating a template) to just selecting required attributed from a master template while creating a new template.

Also, the bank admins were already accustomed to an spreadsheet interface and the unfamiliar interface increased the time taken to perceive the attributes.

Solution

Hi-Fidelity screens were prepared for the finalized work flow for creating the financial templates. Developer feedback was essential to understand technical constraints while designing. Components already existing in the Finacle design system were extensively used to save on developing resources.

Finalized wireframes are confidential in nature. To comply with my non-disclosure agreement, I have omitted and obfuscated confidential information in this case study. You can contact me directly to get more information.

Learnings

Simplicity is strength

As a designer, we are often lured by attractive, trendy and out of the box designs. But, We must always remember the ‘why’. The primary goal is to understand the user, their problems and then come up with a design that solves it.

Seek out feedback early and continually

The trouble with most of us is that we would rather be ruined by praise than saved by criticism. Keeping the stakeholders/users in loop and testing solutions in whatever form (paper, low-fi or hi-fi) as early as possible saves ample amount of time and re-work.

Simplicity is strength

Seek out feedback early and continually

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